Subsidized Daycare—What British Columbia Can Learn from Quebec’s 20-Year Experiment

Main Conclusions

British Columbia’s NDP government recently announced a series of new policies intended to lay the foundation for “universal”, government-subsidized, $10-per-day daycare across the province.

This major policy intervention seems unnecessary as there does not appear to be a wide­spread lack of daycare spots in British Columbia: as of 2016, the province-wide average daycare vacancy rate was 30.9%.

Moreover, Quebec’s ongoing, two-decade experiment with subsidized daycare shows that such a program is unlikely to be either affordable or successful. Quebec’s system is expensive: the government spends over $9,000 per child served, for a total cost of approximately $2.3 billion in 2017.

Advocates nonetheless argue that subsidized daycare will increase maternal labour-force participation and generate tax revenue that offsets program costs; and that the program produces beneficial child-development outcomes.

In reality, such a program is unlikely to pay for itself. The evidence from Quebec’s experience suggests that the tax revenues generated by increased maternal labour-force participation do not offset the full cost of the program.

Evidence of long-lasting gains for child development from subsidized daycare is mixed and studies from Quebec show the program has contributed to significantly worse health and social-development outcomes.

Although Quebec’s program is described as “universal”, in many areas there are still lengthy waiting lists for places in daycare facilities despite very high levels of government spending. Children from higher income families are more likely to obtain a place in daycare.